No barriers to trade for local auto industry please, says Ideas

PETALING JAYA: The Institute for Democracy and Economic Affairs (Ideas) said the government should avoid implementing barriers to trade which are designed to protect Malaysia's domestic automotive industry, including taxes and duties, and be clear about its automotive policy.
"The government needs to have a clear mind on which direction that they are planning to go. Malaysia should be open to trade and look to competition, rather than direct government support, to develop a competitive domestic car industry," Ideas economist Adli Amirullah said in a statement today.
He noted that technical standards on imports to ensure passenger safety are welcome, but not protectionism.
Adli was responding to Prime Minister Tun Dr Mahathir Mohamad's plans to curb car imports and introduce a new national car in the near future.
Meanwhile, he disagrees with Mahathir's claim that the local car industry is at an "infant" stage given that Proton and Perodua have been in the market for at least 33 years and 24 years respectively.
"Perodua itself has grown so much that now it has the highest market share at 39.8% for passenger vehicles and sold a total of 204,887 units in 2017 alone which surpasses all imported cars.
"Proton came third after Honda, with 13.8% of market share for passenger vehicles and 70,991 units sold in 2017. These facts prove that there are flaws in an infant-industry argument. How long should our automotive industry be considered as an 'infant'?"
Commenting on the proposal for a third national car, Adli said he welcomes new players coming into the automotive industry if the government stays away from the market.
"In principle, we should not prevent any market player from entering the industry if they have the capacity to do so. But, the government needs to stay away from the market and should not involve itself directly or indirectly in the process of setting up a third national car."
Instead, he opined that the government should focus on promoting competition.